Axial Market's Forum has an article that I'd recommend to anyone considering a business sale: "9 Things Every Business Owner Needs to Know Before Selling" by Mason Myers, general partner at Greybull Stewardship, an investment partnership of business owners investing in exceptional businesses with $1 to $3 million in operating profit.

In particular, there are four points he makes that I wish every business seller would consider - let me share my thoughts on them:

Get Expert Assistance. Some prospective business sellers strongly object to business broker or investment banker fees. I believe that many such sellers will be surprised by the potential complexity of the business sale process. In fact, a majority of people who try to sell their businesses fail to get them to the finish line, and some of those who do sell end up with deal structures and terms that are far less attractive than they anticipated. Some believe that they can manage the process on their own and simply get expert advice when they run into problems - but that rarely works well unless the seller is experienced at buying and selling companies. Every communication you have with a buyer impacts interest and perceptions of value. I tell my seller clients that negotiation doesn't begin at the end of the deal, it begins with the first contact with a buyer. It's a rare transaction where my expertise and efforts have not made or saved my client far more money than the cost of my fees.

Orderliness is Godliness. I couldn't agree more with Mason. Buyer's continually give me positive feedback in terms of comparing and contrasting Codiligent's thorough and well-organized information packages with those that they see from Do-It-Yourself sellers and those using less competent brokers. When a buyer sees disorder, they wonder if that's a reflection of your overall business - and that creates a perception of risk and undesirability that translates into a lower price and/or worse terms.

GAAP Accounting. I find that many business owners believe their book keepers are doing accounting in accordance with GAAP (generally accepted accounting principles), but during the business sale process their shortcomings are brought to light. Unfortunately, once a buyer finds something wrong with the financials it raises concern that they may not be catching other problems with your financials or operations. Buyers need to be able to rely on accurate financials that are prepared in accordance with GAAP.

Control the Lawyers. It's essential for both a buyer and seller to control their lawyers. Your attorney will craft or review the legal documents and help you understand and protect against legal risk, but they sometimes are overly aggressive in trying to protect you from low-probability risks and may cause enough dissent to threaten the deal. It's important to remember that your attorney is not a party to the deal - only you can make the ultimate decision about your comfort level with the terms and conditions. On one particular $18 million transaction I worked on, there was a legal issue where the probability of the problem was low and the potential financial risk was only about $30,000. Even if the probability of the problem occurring was 0.5% (which is likely much higher than reality) that would mean the probability-weighted cost of the problem was only $150 (i.e. $30,000 * 0.5%). Given that the attorneys hourly rates were about $350 - it was costing more in attorneys fees than the probability weighted financial risk. The attorneys made such a big deal of it that it almost killed the deal - and both sides spent a few thousand dollars in legal fees on that particular issue - until the buyer finally realized how silly this was and reigned in its attorneys.